Credit scores are an important factor to a bank when deciding whether to offer a small business loan to an applicant, according to the US Small Business Administration, or SBA. To lenders, credit scores reflect how well you handle money and may interpret a low credit score as an applicant not possessing the proper skills to manage finances. If you have poor credit, however, you can still qualify for a small business loan.

Business Credit Score

Businesses receive credit scores as do private individuals, but business credit reports go by a 0 to 100 numbering system, according to the SBA. Factors that go into a business credit profile include how often you pay your bills, credit history, and available credit. Most lenders consider a score of 75 as "good" and anything less may make it harder to find a business loan, but there are no particular cutoff scores.

Personal Credit Scores

Personal credit scores work for business loans the same way as with other loans. Anything less than a 640 means you probably cannot find a lender at any of the larger banks, according to Business Finance. A score of 700, however, gives you a much better chance at gaining approval at most lending institutions and at reasonable rates if you want to use a personal loan for your business. If you go for a straight business loan, you want close to an 800 score as business loans are larger than personal loans; this means stricter lending standards, according to Financial Web.

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Credit History Considerations

Generally, you need an extremely strong credit history to qualify for a business loan based on a personal credit. Loan.com suggests business owners build up a business credit history before applying for a loan. You can purchase supplies from vendors who report to credit agencies and build up a business credit score before even setting up operations.

Warning Against Mixing Credit Card Histories

Entrepreneur.com recommends that small business owners avoid mixing their credit and business credit histories, because business loan inquiries lower personal credit scores. In addition to lowering a person's private credit score, using personal information in lieu of business information means the business does not build up business credit history.

Consider Alternative Providers

If you have poor credit and cannot get a loan, consider a community or local bank over a nationwide one. Local banks are more likely to forgive a poor personal credit score if your business has an acceptable rating. Also, some lenders exist that specifically lend money to people with poor credit; however, expect high interest rates.

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About the Author

Russell Huebsch has written freelance articles covering a range of topics from basketball to politics in print and online publications. He graduated from Baylor University in 2009 with a Bachelor of Arts degree in political science.